Manufacturing output has grown by 8.3% since the start of 2010, having fallen sharply as a result of the financial crisis. The manufacturing sector has seen productivity increase more than three times faster than the UK economy as a whole over the past 10 years. It accounts for almost half of UK exports, and directly employs 2.6 million people.
According to Make UK, we now have the highest level of manufacturing stockpiling of any country in the G7 ever. The chamber of commerce tells me that, in the north-east, stockpiling is putting huge pressure on warehousing and cash flow. That is a direct consequence of Brexit uncertainty. What additional support will the Minister offer to manufacturers? I asked a similar question of the Brexit Minister last week, and he did not seem to know what I was talking about. Will the Minister acknowledge the link between manufacturing output, stockpiling, cash flow and financial viability?
My right hon. Friend the Chancellor and other Treasury Ministers are working with the banks, which tell us that they are making funds available to businesses that need support as their cash flow is under pressure and need working capital in the months ahead. Of course, the best service that any of us in this House can do for manufacturers and businesses across the United Kingdom is to support a negotiated exit from the European Union as soon as possible.
Building on the previous question, I am told that manufacturing output in Plymouth is holding up well, but that is partly due to customers purchasing to stockpile because of Brexit uncertainty. That may result in a lack of demand once we get Brexit over the line, if we ever do so. Have the Government given any thought to supporting manufacturing businesses through any short-term downturn that paradoxically might occur once we get Brexit over the line?
The Treasury and other Departments have advanced plans to support the manufacturing sector should that be required in the event of a no-deal exit. The evidence we see shows that, if we can secure a negotiated exit, there is a great deal of business investment waiting to go back into the economy. This year could turn out to be a strong one for the British economy, if only we can secure the deal.
Does the Treasury acknowledge the wisdom in the letter that the Engineering Employers’ Federation, which represents 20,000 companies and 1 million workers, sent to the Prime Minister yesterday? It spoke of the renaissance of manufacturing in the earlier part of the decade, but is now expressing despair and is asking simply for the revocation of article 50.
If the right hon. Gentleman wants to support this country’s manufacturing sector, he and his colleagues should support a deal so we can leave the European Union in an orderly fashion. We are taking a number of important steps to support manufacturing, including increasing the annual investment allowance from £200,000 a year to £1 million, making research and development tax credits more generous, and backing schemes such as “Make Smarter”, which help the manufacturing sector to embrace automation and digital technology and move forward with confidence.
I can confirm that. The UK remains the European leader for foreign direct investment, venture capital investment and tech investment. Even in manufacturing, which is under a certain degree of strain, the UK remains the ninth largest manufacturing nation in the world.
“Strain” is not the word. In the real world, production and manufacturing output remained 6.8% and 2.7% lower respectively in the three months to January 2019, compared with pre-downturn GDP in the first quarter of 2008. After nine years of policy failure, should the Chancellor and his team not stop throwing spanners in the manufacturing works and instead oil the machine?
Not at all. Manufacturing exports are up 35% since 2010. We are investing in the manufacturing sector through our industrial strategy. We are creating a tax system that is pro-business. We are reducing corporate taxes to amongst the lowest in the developed world. The hon. Gentleman would do the opposite and reverse that. The very clear message that businesses give us, particularly international investors in this country, is that the threat of a hard left Labour Government dwarfs the risk of a Brexit outcome. We want to secure the future of the British economy in a resolutely pro-enterprise country.
What can I say? That old chestnut—and the Leader of the Opposition will be in No. 10 today as well. Anyway, I admire the Chancellor’s perseverance in trying to get the Prime Minister to grasp the concept of compromise—a challenging task, I have to say. Perhaps a less onerous task would be to sort out the problem with production. In the three months to January 2019, it fell by 1% compared with the same period last year, driven by a significant fall of 1.5% in manufacturing, which, of course, includes the beleaguered automotive sector. If the Government were a car, it would fail its MOT. The Chancellor has been putting manufacturing into reverse gear. Isn’t it time for a new car with a new driver?
The British economy is remarkably robust in its present state. We are seeing continued economic growth, record levels of employment and record low levels of unemployment. Businesspeople, investors and entrepreneurs the length and breadth of the country know that the greatest threat to our prosperity is a hard left Labour Government.